Netflix lost US subscribers for the first time ever

Netflix lost 126,000 US subscribers in the second quarter (which ended June 30), the company announced in its earnings report today (July 17). Its stock promptly tanked 12% in after-hours trading, dropping below $320 on the news.

Although subscriber growth has been leveling off in the saturated US market, Netflix had expected to add about 300,000 subscribers in the past quarter. Instead, it lost paid viewers for the first time in its history.

The streaming giant also announced lackluster growth in international subscribers, a number investors have been tracking as a measure of future successes. Although Netflix expected to pick up 5 million total new subscribers in Q2, it actually brought in just 2.7 million.

Netflix blamed the drop on a drab content slate and a hangover from its strong growth in the first quarter. In a letter to shareholders (pdf), the company added that its subscriber miss was worse in regions where it had hiked prices. It increased monthly prices by $2 in the US earlier this year.

But Netflix added that rivals like Disney, HBO, and AT&T’s Warner Media—which are all in various stages of releasing or refining their own streaming services—have nothing to do with its subscriber whiff. “We don’t believe competition was a factor since there wasn’t a material change in the competitive landscape during Q2,” the company wrote in its letter.

Still, Netflix tried to project a bit of optimism for the next quarter, when it predicts it will rake in 7 million new subscribers worldwide as popular series like The Crown, and Orange Is the New Black return for new seasons. The company recently announced that season three of Stranger Things, which debuted on July 4, had been viewed by over 40 million subscribers in the first week.